Probably keep in mind that the nominal value of the stocks changing hands on a given day is hundreds of billions of dollars and that an actively trading counterparty is facilitating the movement of that money. What's fair compensation for that?
How did markets function prior to HFT? They're only facilitating exchange between other algorithms, right? And in that case how is it helpful to the market?
Note I'm actually asking these questions - not just being rhetorical. The whole concept of it seems plainly ridiculous to me but I don't know much about this area.
You had 10 very tall loud guys in brightly colored jackets yelling at each other in a pit. Mentally they were running the same algorithms as HFTs, just slower.
Later on you had some fast fingered guys watching charts and mentally running the same algorithms as guys in the pit, just a bit faster.
Except the people were exploiting inefficiencies in markets (and still do today). HFT algorithms exploit inefficiencies in servers, ISPs, fiber optic cable, a competing algorithm's implementation, etc.
